In simpler words, If someone does bad, there's law we have to follow but if we think, No revenge or no teaching lesson so this person doesn't do this again to another person, and should leave everything on "God", Karma will take care of it, then technically, we don't need "court system", law and order in society to punish evil doers as God will take care of it. Is it bad, if we actually want to teach that person a lesson, so they taste their own medicine instead of leaving it on "God". After all, God only helps those who helps themselves. Basically, we are just getting even with that person.

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Laws are rules that bind all people living in a community. Originally they stemmed from Natural Law - "Do unto others as you would have others do unto you." Laws protect our general safety, and ensure our rights as citizens against abuses by other people, by organizations, and by the government itself. We have laws to help provide for our general safety.

Now what you say is true; everything is self-balancing. But the issue most human beings have with that is that it's about souls. We have 8.4 million incarnations of which the last ~84,000 are human incarnations. Most people want to "see justice done" within one lifetime.

The soul accumulates karmas and then must continue to incarnate until the karmas are paid, lifetime after lifetime.

Laws and courts come from wanting everything to resolve in a short time-span and the common desire for civilized behavior. Ever read "Lord of the Flies?" That's the modern world without laws.

As the human race wakes up and people begin to act righteously spontaneously from natural wisdom, laws will be less and less needed.